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Celemics Opens US Subsidiary to Sell NGS Target Capture Kits

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NEW YORK (GenomeWeb) – Celemics, a Korean manufacturer of targeted capture kits for next-generation sequencing, will now sell its products in North America thorough a recently established California-based subsidiary.

With the move, the company hopes to offer US customers flexible and customizable targeted sequencing kits at a lower cost that those currently available. The new subsidiary also gives the company a foothold in the US as it considers a future

Founded initially by three professors at Seoul National University, Celemics has been focused in the last several years on selling kits in Europe and Asia, as well as providing targeted sequencing services and other customized panels within Korea for inherited cancer risk mutations. According to the company's website, its target enrichment methods are based on in-solution hybrid capture technology.

The company's North American expansion will focus only on the kit sales side of its business, not its sequencing services, Jason DeFrancesco, business development manager of the new Celemics America, told GenomeWeb this week.

"In Korea Celemics exists both as a targeted sequencing reagent manufacturer and also as a service provider, but we are not going to be approaching the US market as a service provider, we are going to focus 100 percent on targeted sequencing reagents," he explained.

The company will offer custom kits — which he said make up a majority of Celemics' current business and will likely also be a major aspect of its US sales — and three pre-defined content sets, a BRCA 1 and 2 kit, a larger inherited cancer risk panel, and a somatic mutation panel covering 35 genes.

Celemics manufactures its kits for the Illumina HiSeq, MiSeq and NextSeq, as well as for Thermo Fisher Ion Torrent sequencing.

According to DeFrancesco, Celemics America hopes to attract customers by offering research-use targeted capture kits that are significantly cheaper than those currently available on the market from large kit manufacturers like Agilent, Illumina, and Life Technologies.

Celemics claims to distinguish itself from other methods or providers through its panel design and creation process, in which the company precisely rebalances the probes for a particular kit following a pre-production pilot test.

This allows the company to overcome uniformity issues and coverage limitations associated with targeted sequencing.

"Whenever you do deep sequencing on a restricted region, you are going to have certain issues, such as coverage limitation, uniformity limitations, GC bias, and amplification bias," DeFrancesco said.

"A large amount of our orders are actually customized kits so no two kits are really going to be alike because you have researchers or different service providers with unique needs," he said. "What we have done that is really proprietary and unique [is to] run a pre-performance pilot for each kit."

DeFrancesco decline to provide a great amount of detail on Celemics' process, but noted that "we either add probes or remove probes and adjust the steps after that pilot, and what we have found is that coverage uniformity and sensitivity have drastically improved."

Located in Irvine, Celemics' new American branch will focus first on gaining customers in the Southern California area. DeFrancesco said that the firm has begun conversations with academic centers like the California Institute of Technology and UC Irvine, but also intends to pursue business with the pharmaceutical market.

Once it has established itself in local markets, Celemics then plans to expand to sequencing service providers across North America in 2016, with entry into the rest of the US, the Canadian market, and then Mexico and Central America.

"The cost of NGS is continuously going down, which is a good thing, and we are seeing more insurance companies open to reimbursement, but for service providers, what that also does consequently is reduce profit margin," he said.

"If you break down the actual cost of sequencing, almost 80 percent is going to sample prep and library prep … so we saw an immediate need to bring a product to the US that could decrease those costs but also increase the level of performance that each kit is held to. The value we are going to bring in the US is providing those high-performing kits at a much reduced cost."

DeFrancesco estimated that the company's products are typically 30 percent to 40 percent less expensive than that of the four major targeted sequencing kit manufacturers.

"We are able to provide this sort of competitive pricing for a couple of reasons," he told GenomeWeb. "First, we are able to take advantage of producing the kits in Korea." Secondly and more importantly, he said, the company's founding professors developed Celemics' target capture technology on their own "without the typical millions of dollars needed to go into research and development."

Currently, the company's kits will be sold in the US as research-use-only, but DeFrancesco said that Celemics America does eventually plan to seek regulatory approval for a product based on its technology.

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